Kensington Capital Advisors said it has suspended redemptions at the Kensington Private Equity Fund, moving to conserve cash in a market that has seen muted exits and lower valuations.
The freeze is effective immediately and runs for an initial 90 days, with the option to extend under the fund’s governing terms.
The halt covers pending requests as well as any new redemption orders filed during the suspension.
Kensington framed the step as a way to avoid forced sales of portfolio holdings at discounted prices, a risk that rises when merger activity and listings slow.
The firm said it wants to protect long-term returns and position the vehicle to meet its objectives once markets stabilize.
Kensington is cutting the management fee by 10 basis points across all unit classes starting Sept. 30.
The firm did not disclose the fund’s size or provide a timeline for when withdrawals might resume beyond the 90-day window. The manager said it will look to improve liquidity as market conditions normalize.
Private equity funds that offer periodic redemptions can be tested when exit channels narrow. Slower distributions from portfolio companies tighten the cash available to meet withdrawals, while markdowns on holdings make selling at fair value harder.
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There are early signs of a thaw, including claims that the IPO window has reopened in the United States, but deal flow remains uneven and completion risk is still elevated.
Kensington said the liquidity squeeze has been building over the past 3 years, citing historically low IPO and M&A volumes that have weighed on private market pricing that backdrop has also complicated fundraising for new vintages across the industry, and it has sharpened the trade-off facing open ended vehicles between honoring redemptions and preserving long-term value.
The decision also lands as larger Canadian asset managers continue to push deeper into alternatives. AGF, which acquired a 51% interest in Kensington in March 2024, has been expanding its private markets platform across venture capital, growth equity, and mid-market buyouts.
Kensington Capital Partners Limited, the broader firm behind the manager, oversees about $2.2 billion across multiple strategies, according to company materials.
